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Maryland 27, America 16, U.s. 14, Elisabeth Rosenthal 13, New Jersey 11, Fema 10, Washington 9, New York 8, Sandy 7, Christie 4, Nebraska 4, United States 3, Chris Christie 3, New York City 3, D.c. 3, Elizabeth Rosenthal 3, Joplin 3, RenÉe Martin 3, Anthony 2, Sheryl Sandberg 2,
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  CSPAN    Public Affairs    News  News/Business.  

    July 7, 2013
    3:35 - 6:01pm EDT  

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with hindrance or contributions to make -- economic quality. >> five years from now i think we are still going to be looking at a world dominated by traditional executives. forle have been waiting years to see the pay tv package blowhard. it is starting to happen. change ine of the the business model or technology, but the accumulating rates. over 10 years it will be a large audience that programmers and the entertainment industry will have to address answer. >> we are trying to set up an opportunity. to decide the channel share or different side of the spectrum.
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rearrange the spectrum, a turnaround, and sell it to the wireless companies. >> more of what is happening in today's cable industry from today's cable show on "the communicator's." >> next, a discussion about childbirth costs in the u.s. with elizabeth rosenthal. this is from today's "washington journal." it is about 40 minutes. host: now joining us elisabeth rosenthal, correspondent for the "new york times," looking at american health care system and its expenses. this past week, american way of birth, the costliest in the world. itsok at childbirth and
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expense. thank you so much for joining us, elisabeth rosenthal. guest: thank you for having me here. host: why did the "new york times" have truven health analytics look at the cost of giving birth in america? what value going on this topic? guest: a group called truven analytics to the report of commission by three healthcare groups this year to look at the changes in childbirth costs. the numbers were really eye- popping to me. i wanted to know a little bit more about how that had changed over time because i think we have all seen health care cost escalates. we really wanted to find why is this happening. host: why look at birth? you talk about how this is one of the most fundamental things that women, families, go through an experience, so why look at this in particular? guest: when i initially laid out this series, i was not going to include childbirth. it had not even occurred to me. when we sorted talking about at the time, i found out that i older colleagues were energized
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by things like hip replacements and colonoscopies, but my younger colleagues were all complaining about how expensive childbirth had become. these are people with insurance, so then when i started asking around, i discovered that there were many people whose insurance is not even cover them for childbirth anymore. i think to me, childbirth is one of those kind of iconic moments. it is a healthcare intervention, but it is the one that perpetuates our country and our species, so if insurance is not covering that, that is not a good sign. host: the "new york times" look at the average 2012 amount paid by country by rate. commercial delivery, $9700. cesarean birth, over $15,000. that is usually above other developed nations. why the huge price cap? guest: that number for the u.s.
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actually lays out a number of things because that probably would not include the anesthesiologist fee, a radiologist fee for scan, and that talks to why it is so expensive because most countries consider childbirth a kind of package, it is very hard to childbirth without a scan. we tend to what we call unbundle. we charge for every little piece as if you are going through a supermarket and have celery and roast beef for dinner tonight. we charge item by item by item, and the costs really add up. that is one of the reasons. another reason is that hospital excesses tend to be more. our doctors fees tend to be more. we do more tests in part
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because people make money from everything we do. host: looking at other countries in the extensive report, you can see switzerland at $4000 compared to america, over $9,000. france, $3500. even a cesarean session coming in significantly lower. do these countries offer less high-quality care than the united states? how does the care for a mother and child differ for those countries in the u.s., or does it? guest: there are some differences, but i should point out that in response to our article, we got a number of comments from people who said i was living in switzerland or in france or in denmark, and it was heaven to have a child there. and then i came back to the u.s. and had a child, and it was -- you know, the services are fine. they do not like the bills when they compared i think that is the big difference is. i should point out that some of these countries have a national
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health system, others have fees for service medicines like ours, they just cost it differently. so i do not think there is any difference to the kind of services. we tend to do more of things that cost more. like cesarean sections. we might say, get ultrasounds every week or twice a week for the last trimester. that may be appropriate in some cases. but they also do the things that patients who do not need it. we also do not use midwifery much compared to other countries. host: elisabeth rosenthal writes in her recent "new york times" story -- studies show that their citizens do not have less access to care or to high- tech care during pregnancy than americans. she also writes that payments and incentives for providers mean that american women with normal pregnancies tend to get more of everything, necessary or not, from blood tests to ultrasound scans.
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and then finally, they financially suffer the consequence. elisabeth rosenthal, tell us about some of the families that you talked to as they prepared to had babies -- to have babies. were they able to keep track of very sensitive than what the bill would ultimately be? guest: the telling thing for me was the main family i focus on, a young couple, renée martin and her husband, mark willits, in new hampshire. they're the most responsible kids i have met in a long time. they tried to do everything right. get they wanted to pregnant, these are two young adults who have always had health insurance. they tried to get health
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insurance for their pregnancy, but discovered, and this is a catch i did not even know about, and many states at this moment in time, you have to buy a pregnancy rider if you or your health insurance to cover pregnancy. and what that means, and their case, they researched it, they discovered that to get covered for pregnancy, they would have to pay $800 a month -- a month -- to have coverage for pregnancy, and the catch-22 is that they would have to buy the coverage before they got pregnant, right, so you could pay $10,000, $15,000 a year to have coverage for pregnancy, not knowing if you are going to get pregnant. so where they were in life, they decided to just get regular insurance. got got pregnant when they pregnant. they were not particularly trying. and then they had to approach it as a shopping trip. so they went to the hospital and said what is this going to cost us. at first the hospital said we don't know, and the next response that i was oh, between $4000 and 45,000 dollars. these are young professionals trying to be response will and
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plan out their finances, and if you got an estimate like that for a car or kitchen remodel, you could not go forward. host: elisabeth rosenthal has a doctorate degree, she studied history and biology at stanford. she has been with the "new york times" since 1993. she is working on a year-long series right now looking at health care costs and the united states. if you'd like to join the conversation, we have socialized if you're insured, you can call it that (202) 585-3880. if you are uninsured, call us at (202) 585-3881. and if you are a healthcare provider, you can call us at (202) 585-3882. what is a difference between those who have insurance and those who do not have insurance? birth in terms of their experience, they both will suffer financially.
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people who don't have insurance have to start from square one and see if they're qualified for medicaid or a state program, which might subsidize insurance, or look for a hospital because of some do now offer a package rates. but you have to be really careful to ask what is included in that package because there are often additional fees. people who have insurance are often blindsided because they think oh, well as many of my colleagues at the "new york times" did, i have insurance, this will cover me. and then the whole pregnancy, or at the very end of pregnancy, they are hit with bills in the $4000 to $6,000 range. it is a lot of money. this can really add up. ofecially if you're in one the high-cost urban areas for medical care. host: let's go to the phone, next call is from nick in maryland. calling on our insured line.
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caller: good morning. my understanding is the cost of medical care in the u.s. is also related to cost shifting based upon those who do have insurance having to pay an additional premium, an additional amount, to cover the cost of those who do not have insurance. and therefore is a person is in a situation where they do not have insurance, or the insurance is not going to cover particular received your, then the rate that such a patient is charged is the inflated rate. that sounds terribly unfair to me. guest: yes, i think often the uninsured face the highest rates because they face the rack rates. there's also this issue of cost
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shifting him a but i don't, and i know it is often given as a reason for why our rates are so high, but i would point out that even our medicaid rates pregnancy are much higher than those in other countries eared so i don't think cost shifting really explains the very high rates of pregnancy. there aren't a lot of uncompensated deliveries going on now. poor people who can't afford delivery tends to be eligible for medicaid or some of the low income assistance programs for pregnancy. the people with more means, like renée martin in the series, she basically will try very hard to pay those bills. host: columbus, ohio, gerald is uninsured. go ahead. caller: i'm calling in to make a comment.
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the cost of insurance or the cost of medical period -- i already came to the same conclusion that they can do at the end of the article. it costs so much because they charge whatever they want. what it is costing to have it done is how much they want to charge. they have no morality when it comes to that. guest: yes, i think we price medical care the way we have priced almost any other good. aw much does it cost to make smart phone? certainly not $400, $500. you can sell a smart phone for $400 because that is what people are willing to pay, and that is what happens in medical, too. hospital pay is getting x amount of money, we will get that too. we would like to say that our healthcare is market driven, it is not a functional
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market. thee is not a vision, as "time" magazine article pointed out. how hospitals charge would they want. that is what we find out again and again in this series. patients do not know the right they're paying. thedoctors do not know price the delivery costs. so how can you choose wisely? host: elisabeth rosenthal wrote a piece for the "new york times" last month, it looks specifically at colonoscopies, the cost differences based on region and hospitals. you can also see other procedures and how much they cost and he united states. the average u.s. price up here, and the average price in other
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countries, things like a hip placement costs on average $40,000 in the u.s., they cost $7,700 in spain. the drug lipitor costs $124 in the u.s. and $6 in new zealand. let's go to a healthcare provider in washington, d.c. caller: as i've been driving home, i would just like to comment on some of the issues on bundling or unbundling, i should say. you have to be clear of how we have been compensated when they look at the entire fee. we have been set on global fees for the delivery and postpartum for quite a while. so i think there is a misperception out there that somehow at least the obstetrician or the physician is being compensated for ordering extra test or for doing a cesarean section versus a vaginal delivery. the process has always been one great bundle. so i think we are on the forefront of what a lot of
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other specialists are probably going to be headed at. i think talking about the cost of delivery between, i think you had the range of 4000 to $45,000. a small part of that is the obstetrician, which has been controlled for a long while. it is all of the other components are those are my comments. guest: yes, i think the obstetrician's have been on the forefront of bundle fees when you look the total fee for pregnancy. the obstetricians charges have come at about a quarter or less, and obstetricians have their fees have not escalated the way the hospital fees and all the ancillary fees have increased. they do, in that sense, provide a model for what could be done for other doctors. i have to say obstetricians work incredibly hard. they are up all night. they are not the big money
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doctors in our society. that is absolutely true. it is really the system that is the problem, and the way we do things that leads to these high prices. host: the "new york times" shows the cost of the childbirth in the u.s., the average charge for medical care serenity birth of a child totaled more than $37,000 according to a study by truven health analytics. the charge is given here are the building charges. you can be broken down. prenatal care, everything from radiology fees to pharmacy fees to lab fees, over $6,000. you see the delivery section, over $18,000. as our caller pointed out, doctors over $3800. you see the cost for postpartum care, also the care given to newborns. any of these numbers really
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stand out to you, elisabeth rosenthal, as surprising? guest: the hospital care certainly stands out to me. formve a very medicalized of birth. which i think speaks to the fact that we don't allow midwives to be very participatory. i am not saying that midwives are the answer for everything. some people cannot use midwives. ie of the craziest things learned in doing this story is that we -- many insurance policies, specifically don't allow midwives. so the woman wants to choose the cheaper option, and if she is medically qualified and say to that, her insurance won't pay for it. that is nuts. host: john is insured.
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caller: good morning, ladies. thank you for this interesting topic. i am active duty military, and i am enrolled under tri-care. that is really at home as opposed to comparing healthcare cost and to europe, but we have actually a domestic, socialized healthcare system, which treats a considerable amount of folks. i have not heard any numbers comparing the cost of childcare, and what is the cost to give a birth at walter reed hospital, for example, to a spouse or to a military member compared to what cuts in the private sector at a civilian hospital? have you done any research to compare and contrast those two numbers? guest: i'm afraid i have not, but i'm going to now. that is a fascinating question because obviously if they can be done for a lot cheaper there, that suggests it could be on the outside. and it provides a model. another part of the reason we pay so much for birth at right at hospitals or city state hospitals, is that there is no system.
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every birth is negotiated one by one by one, whereas in a system like the military is using, you have a lot of our giving power, you have a lot of control over the entire system to control costs. so we are doing things one of the least efficient ways possible. i will look at this when i get to work this week. host: a lot of your reporting has looked at how procedure in denver can cost a different amount than a procedure in new york city. guest: yes, you do see big regional variations across the u.s. all of our numbers are higher than all of the numbers pretty much in any of the european countries. rememberk we have to
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even the places that we think of as cheap would be hugely expensive compared to other countries. regional is a lot of variation with respect to childbirth. i was somewhat chagrined to see that new york stands out like a sore thumb as being much higher than the rest of the country. it is not always the places that you would predict that are high cost. some larger cities that have, probably in some cases more managed care, have relatively low cost. i think los angeles and san francisco were not particularly high in the childbirth. so there is a lot of regional variations. it is very hard for consumers who are trying to be smart about this to know what is a reasonable cost in my city. because obviously a reasonable cost for everything in new york city is going to be higher than a reasonable cost for everything in a small town
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someplace far away. host: elisabeth rosenthal, correspondent for the "new york times," here is our first input from a female viewer. jan writes on twitter -- how much do necessary tests and malpractice insurance factor into these costs? guest: let me do the second part of the question first. i think malpractice is a big issue for obstetricians. they pay sometimes a couple hundred thousand dollars a year for malpractice. so it is a part of the problem, but the more i spoke to people, the more i thought it was not a huge part of the problem. like i said, the obstetricians work for you hard. they have a very demanding job. they trained for years. and their fees are not the big part of the problem. so, yes, malpractice is there, but it is really not the issue. necessaryf the testing, what you see is we do
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the necessary tests as other countries do the necessary tests, but we take those tests and do them more and more and more. i think there is a kind of sense with the way insurance in our country works that why not just get two scans a week, we will see how baby is, we will get a sense of how things are going. we have the sense that if you are insured, no one is paying, but of course we are all paying. there is no harm, but there is. host: cornelius, north carolina, jeff is insured. go ahead, jeff. caller: my wife and i, this is relevant because we are pregnant right now. it will be in mid-january. something that has not been discussed, and i've been doing all of the the father reading,
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having a good time, but our -- postpartum, we are going to be paying a lot this year. 1231, we get to roll it over and it would all again next year. we will max out of pocket this year for all of the pre-stuff, we will have the baby next her, and guess what, we'll will get to pay it out of pocket again. we talk about pregnancy as one medical for seizure or one issue, but it looks like some people, just because of the timing of it, and of paying twice. a thought to have come i really appreciate that. thank you. host: jeff, before we let you go -- i think we just lost him. darn. i was going to get a sense of how much it was costing. go-ahead and answer his question for us, elisabeth. guest: there are many blind fields people have to cross with any medical procedure in this country. i did hear the same thing from several other patients. i hate to call pregnant women patients, but people interacting with the medical system, where they reach their out-of-pocket max and one year,
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but of course primacy is nine months. they go into the next year, and the insurance who tends to view things is very black and white, and this is our policy, co-pays and the deductibles reset to january 1 so you are out of luck. i think that is not rational. that is not what anyone in a sensible world would want. the other thing i heard from people, and i don't know if the caller has experienced this, as they put money aside in a healthcare spending account, so it would be -- they could use tax-free money to pay for their childbirth, but then the bills took a year and a half, so they cannot use the money they set aside to pay for the childbirth. so there are a hundred different kinds of loopholes. it is very hard.
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when you are pregnant, you are obviously very anxious about your child and your pregnancy, and so to have to keep track of all those financial stuff, it is a role burden. host: elisabeth rosenthal writes about one couple in particular, who she talked about already this morning, they said they did not know if their pregnancy would fall in the $4000 or $40,000 end of the range. the couple had a hard time budgeting their finances or imagining their future. john is a physician. from illinois. hi, john. caller: hello. i'm a family practitioner in the rural part of indiana. we have a lot of poor people there and a lot of unmarried people there. there was a gentleman in the earlier section who said that parents have to do what they have to do. i would just point out that an abortion is a lot cheaper than delivering a baby.
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sometimes that's what they do. host: do you have -- do you help patients through giving birth? do you help them along because you are a general doctor? caller: [no audio] i do not anymore. it's too complicated. you have two lives in your hands. modern obstetrics is very different than it was in the 1970's when i graduated. started. it is more complicated. host: ok. ok. guest: part of what this physician is telling us is that we really need a plan to make sure that pregnancies are covered and covered well. one of the most disturbing things i've heard from people was -- these are people who are talking about first children. worriedegnant, and i'm
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i won't be able to afford the delivery. to me, a measure of a society is how it tends to this vital life moment. we're not doing a very good job vis-à-vis our citizens at the moment. host: arkansas, anthony joins us on our uninsured callers line. anthony. caller: good morning to both of you. host: good morning. caller: we continuously repeat the problems of the situation, but it's like we don't understand where the problem lies. the insurance companies are making megabucks. they don't want to change the
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system. my question is, what might the average citizen and voter, what action can we take to change it other than going to the polls, trying to elect people who say they're going to look out for our interests but as soon as i get into an office, they forget who we are? and then they go to the insurance companies for campaigns. this is a good conversation. our children are suffering. they're being born, then set to adoption. all of more money and these things. what can the average citizen like me expect in the near future? as far as insurance? guest: one of the reasons i was desperate to do this series is i really want this issue of health care to be a voting issue.
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part of people's frustration is that they open these bills in their living room, they think it is ridiculous, they set up a payment plan to deal with the charges, they may differ care that they cannot afford, but there is no box on a ballot that says, i want something different. that has allowed many politicians to ignore or put aside the issues. there is a mantra that we have the best medical system in the world, we're just trying to tweak the insurance. but i think people are much more dissatisfied than that. i'm hoping this series will set off a national conversation, that people will be asking their politicians and politicians will make it their issue. because, you know, when we do
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the stories, we got the first story on colonoscopy, 15,000 comments. the pregnancy story, likewise. thousands and thousands of comments, expressing incredible anger and frustration. so i hope there will be a way that people can vote on this issue in the future. host: elisabeth rosenthal's story includes the two -- $2 trillion medical bill. colonoscopies explain the reason the world is led by the u.s.. she writes -- hospitals last year, looking for a 62-year-old grandmother but who had the means to pay, and they range andm $11,000 to $125,000, that, it was a fictitious grandmother, but part of a discovery process to find out how much healthcare actually costs. well, we're looking at her most recent piece in this series of health care, american way of birth the costliest in the
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world. our next caller is in atlanta, georgia, who works in health care. good morning. how are you? caller: thank you for having me on. i was listening to this entirely. i'm a manager at a facility. not mindthis, i do explaining, but what i want to clarify it is this discussion of services for nurses, these are highly skilled, even your medical technician in the library is an four-year degree holder. two years of technical school afterwards. is it not just people who are pressing a button for some money. -- it is not just people who are pressing a button for money.
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we lost $6 million last year. we also wrote off $80 million in care. people who could not pay, all these people who you say are opening their bills -- they are not paying. ok? so, 80 million dollars was written off, but we still have to pay our workers. ok? and the other thing i want to talk about, andeven if the mother is not from the u.s., we're trying to help them and some kind oft them financial help. getting them on medicaid. what they are not discussing is that we get less than a third from medicaid. we do not get anything from them hardly, but they make up 75% of the patients who walk through our door. 25% of those people have insurance. 75% of them did not. ok? so we don't get to negotiate with medicaid. we have to pay whatever they tell us to pay. ok? so for the 25% that have insurance, we do raise costs to try to cover the losses from the other 75%.
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that do not come in to try to make up for the medicaid loss. this is what you get when you have a fee-for-service healthcare. host: thank you. let's throw all of those comments to elizabeth rosenthal. guest: there's a lot to talk about here, but i would agree that fee-for-service healthcare is our primary problem. we pay for things one by one by one. there are hospitals and health facilities that are doing a lot of indigent care that are losing money because they have what is called a bad paramedics that -- bad pair mix. meeting they take care of a lot of pour or uninsured people. on the other hand, there was a list published last week of the 200 best paid ceo's in the u.s. probably 20% of them were from the healthcare industry. i'm sure not from this particular facility we were talking about.
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there really are the haves and the have-nots. the have's will target those kinds of procedures and those kinds of patient populations where they know they will get the $90,000 reimbursement for the hip replacement rather than the medicaid hip replacement reimbursement. interventional cardiology facilities make money. you know? there's a lot of talk in hospitals about which units are profit centers and which are not. there are some health centers and hospitals out there that are doing amazing work that are losing a lot of money because they are not doing the profit items and they don't have the profitable patient population. host: let's hear from anne in aurora, colorado, insured. caller: i'm calling about a situation that was mentioned in the article on colonoscopy. in my own life with dermatology
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-- i do not know about pregnancies, but in my own life, -- i had a small cancer thing removed from my face for about $350. three years later i had a similar thing removed for $5,000. because the office that i went to no longer allow those supple procedures to be done by a practitioner. it had to be done by a surgeon. it escalated in cost hugely. one other thing, i wondered, if you could comment on it. you mentioned about the competition factor. in articles i have read in europe or other places in the world, there may be compensation allowed between insurance companies, but medical costs are designated by cooperation between medical insurance and whatever. so thank you.
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guest: i'm not sure if i understood the second part of your question. host: it sounded like she was talking about how insurance companies negotiate or work with the providers, the hospital centers or otherwise to come up with prices. hash is what everyone else to sort of deal with. guest: the first part of the comment about the facilities fees is on target. how much you pay in this country depends a lot on where procedure is done. if it is done in an office, in a surgery center, or hospital. many procedures could be done in any of those locations, but our insurance system reimburses a lot more if it is done as surgery. it is easy to call everything
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surgery. that is what has happened. we trended towards the most expensive and most profitable way to do things, rather than the necessary way. little skin operations that could be done in a doctor's office, three years later they are done in a surgery center or hospital outpatient department. part the bills are higher by of the problem is we have insurers negotiating on our behalf, but they're not negotiating for what's good for our health. there negotiating for what's in line with our plan, what gives them profitable plan relationship with the employers. there are a lot of things we can do to change that, but we haven't done any of them yet. host: elisabeth rosenthal, one of the couples you profile in your story, renée martin, the woman about to have a baby, said, i feel like i'm in a used
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car lot as she talked about paying for her care out of pocket. in a follow-up piece you did this week about midwives and the response you have gotten, whopoint out that one woman rode into you said that her insurer, united healthcare -- insurer, united healthcare, refused to pay for her midwife delivery. she fought back and they relented. how much of this is negotiation? guest: one thing i take away from the series is that people can negotiate. if you fight back, you might a discount.
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renée fought back time and time again. sometimes she got a little bit of a discount and sometimes she did not. it is a funny world. someone is saying to you, do you want an epidural? as you are in early labor. you're, well, how much does that cost? they give you a price if they can, which they probably can't, and you are saying, ok, i will pay 60% of that. that's not the kind of health care system i imagined when i went to medical school. host: how much may change under the affordable care act? you write that midwifery might be seen if early -- differently. birth centers, midwife care under medicare. what may change? guest: one important thing will change vis-à-vis pregnancy is that health insurance plans will not be able to excuse -- exxclude -- exclude it entirely as a pre-existing condition as of next year. in is, so that is a really important change. on the other hand, i would say
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from talking to many people who have insurance, they have great insurance but are ending up with a lot of out-of-pocket costs. it's really important for us to think of a better way to reimburse rather than item by item. we need to say, this is a pregnancy package. to me, i don't think we want to be asking people in the delivery room, can you write me a check? and that is what we're doing now. the other analogy renée used was a menu with no prices on it. host: last call for elisabeth rosenthal. this one from shelby, north carolina. neil is insured. go ahead, neil. caller: thank you for doing this. this is a great discussion. one thing i have not heard is the word efficiency.
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if yous like to me that look at the european model and you look at almost anywhere else in the world, we are more efficient than they are in every area. we build better cars, we build better this or that, except healthcare. we have the most inefficient healthcare system perhaps in the history of the world. it just doesn't make sense. if you walk into a physician's office, emergency room or some other providing place and there are 20 people in the place and each one of those people have the same problem, they would probably all be charged a different price. no one can tell pricing. can you imagine running any other business that way? it's insanity. if we am saying is that could apply some free-market, reasonable principles to health care, i believe we could dramatically move the cost.
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approximatelya third of the cost of health care now is administration. host: let's go to our guest, elizabeth rosenthal. guest: that's really important. there are a lot of ways to make this function more as a system. one of the callers suggested to set pricing. this is what an mri scan costs. maybe you allow a little bit for regional variation. then you take away 10 phone calls back-and-forth bargaining, approvals. there are lots of ways to make this function as a system. it's more like a used car lot. host: elisabeth rosenthal, correspondent for the "new york times." american way of birth, costliest in the world. piece.ent you can find this on the "new york times" website and follow thank you for joining us this morning.
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guest: thanks for having me. [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] >> on the next "washington onurnal," russell moore religion and politics, and a director at the george mason masters program for transportation policy talks about the creation of the interstate highway system and the trust fund. "washington journal," live at 7:00 a.m. eastern on c-span. now, democratic congressman and house minority whip steny hoyer of maryland in a round-table discussion with students about college affordability in light of student loan interest rates doubling at the beginning of the month. from the university of maryland, this is about one hour. >> the first thing i thought we would do is i know you just introduce yourself, but i'm like everybody -- hi, there. >> hi, how are you?
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>> how are you? hi, sarah. the lady with the money, yes? wonderful.een she does a great job here at the university. let me start by telling you as some of you may know, before your parents were born, i was a student here at the university of maryland. literally, depending on how late your parents had you. and i started here in 1957, and i am still alive, how about that? that is the good news. the news you are going to be hard to hear is that my first semester cost me $86, 15 credits. >> wow. >> isn't that incredible?
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md.-college park -- i did not start to concentrate until my second year here at maryland, the same sort of story. better in high school that i did in my first year of college. but i got into maryland, the university of maryland, if you had a c c average and graduated from in maryland high school, and you got in, no questions asked, and i came to maryland, and i was a commuting students. this was incredible. costs confronting college students in america, and at state college, state colleges were, theoretically, very affordable.
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have state colleges. they are open to all and very affordable. in fact, they have gotten a lot more expensive. the 50 years go by and things get more expensive, inflation, its center, but more expensive relative to even when i went to school in real terms. we it is very important that keep college affordable, not for you or for you or for you. it is very important that we do so for america. because you and you and you and you will make a difference to america, and if we do not make sure that the best and brightest can get into school and can afford school, and, yes, i went into public service shortly. five months out of georgetown law school. graduated towards down --
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georgetown. and i practiced law, but i did not carry a great debt. called at what was national defense education act alone. i can remember being at hillcrest high school. none of you know where hillcrest heights is, but this is my neighborhood where i live. 1957.mber, i was listening to my radio been a dodge. -- in a dodge. vehicleians have lost a they called sputnik, and it was circling the globe. america was shocked. america was shot that we were not first in space. and dwight eisenhower, the
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republican president of united states said we need to make sure our young people can get into school and stay in school, and we adopted the defense education act, and that is why it is called the defense education act. we have to make sure young people could get to school. i went to law school because i was working at the cia as a file clerk. six years. toas only taking 11 credits 12 credits, and i went to school between 8:00 to 2:00, and then going to work. the debate that is going on in washington today is about how we make college affordable and accessible to our best and brightest and make sure they do not graduate from school so they cannot go into public service, where they cannot be teachers.
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somebody going to school arrying $65,000, $75,000, $95,000 in a debt load is thinking, "how can i earn enough money? looking for money to pay it back. and i wanted to talk to you about it. and i want to talk to you particularly about your situation, because although we talk a lot in the abstract, but ultimately, the policies that we with are discreet individuals. they affect people personally. it is hard to think in this terms. so i think you for being here. as you know, we are having a debate in washington as to how whether were loans,
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cap them at the time you take them, having a market base before that, but they are different alternatives. consumers are for the interest rates. that is a no-brainer. that is why a lot of us of homes that we have financed, because we have got interest rates going. so i wanted to hear from you. and, sarah, why do you not start? >> i am the assistant vice president for financial aid here at the university of maryland. >> my name is allison thompson, and i am an engineering student from chicago, illinois. >> and where are you from? >> from maryland.
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>> ok. andi am from annapolis, md., i am looking at being in government and politics. >> i am from southern maryland. >> where it in southern maryland? >> severna, maryland. jersey and noww lived in bel-air maryland. year phda second- student. am from new jersey. >> i am from new jersey, as well, in my name is amy waterhouse. >> i am also a second-year graduate student, and a graduate of the st. mary's college in
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maryland. >> wonderful. >> do you know who i am? >> yes, i do. >> i am a rising senior. >> i graduated one year ago with a degree in history. i am from baltimore, and now we work for a criminal justice foundation. >> we want to thank all of you. encouraging you to but is a bit, and we would like to. working for a senator and a legislative director for years, i am lucky to have him with me, and the reason i introduced him to you, and you to him, it is because he is in charge of this issue. he is here to listen and to
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learn. why do you not come up to the table? and tom runs the congressional office. our communications director is here. ok. what i want to hear from you and what tom wants to hear from you, because this makes a difference, like i said, you are not -- you're thinking, what is this policy going to mean? somebody inthing to
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a circumstance. how are you? come on not. have a secret we have enough seeds. if we do not, we will move some of. does anybody know the doctor, by the way? themade sure that we did right thing. ok. who wants to be first in telling me what your situation is and what your challenges are and why it is important to you? in,ou know, we have a bill
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some of us, that freezes for at least one year, maybe even two years, beat 3.4% on the -- the 3.4% ons subsidized loans. thee we pass on the house, market value, it continues to float even after. so on like a house -- i take out where i have a fixed rate mortgage, this would not be fixed rate. it would float based upon the market. the problem with that is we would not know. i know this is important for your education, and i could not have completed georgetown
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without my mba. i think khaybar-1 thousand i did not borrow the first year. this is for our country. to get the best and brightest minds to contribute to our country.
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ok. two has a thought? who has a challenge? i know some of you do, because i have read some of your resumes. >> congressman, i have a question. if we are truly concerned about america and america's future, you have to go to graduate school to excel in any type of career or field. we are wondering why that is not available to you as an option? bill gates is probably not sure of that. mark zuckerberg probably is not sure of it, either. we deal in a world of alternatives.
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of dollars number available. resources, youe can subsidize more, but that was the priority. i think that is essentially a shorthand answer. it was the most efficient use of resources to assure the undergraduate degree. with a graduate degree, the loans that are available, we got an mba, and while the loans are available, they are not subsidized loans. everybody knows if you do not graduate from high school, the chances of getting a decent wage are very substantially reduced. if you graduate from high school, you are going to do better. some college, community college, you are going to do better.
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that is the reason. there was a sense. notsomething that we did say, we believe, because this is in the best interest of the country, we ought not to look at student loans as a deficit reducer. it ought to be neutral. weat is to say at morris, should not lose any money, and at worst, we ought not make any money, at best. we want to make it as affordable as possible.
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whether the democrats want a neutral or the republicans want a neutral. this would only be putting a bandage on a larger problem. >> i am a graduate student, but a lot of my friends have gone out to the working world. they cannot buy a house. cannot buy new cars. you are creating a generation of adults who cannot put any money into anything except their student loans, so in the long run, you are only hurting the economy. young adults today actually pay this to put to work -- to their student debt, putting money on a down payment of the house, supporting local businesses, supporting other businesses.
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excellent that is an point, to the extent we put some of our most capable people deeply in debt. this is 7% driven by the consumer in this economy. we undermine not only their lives and their ability to purchase cars, houses, necessities, to have children, -- >> and it is the grandparents of those people. you are not crippling just one generation, you are crippling several. >> right. good point. i agree with you. >> it is really important. obviously, a sizable part of my income.
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this definitely does make it more difficult to buy a car, buy a house. i did not know every month what i would have to pay, i know it is so much harder. not know month-to-month whether i could afford it. this is based on conditions largely ahead of my control. once you take it out, again, the mortgage is a fixed-rate mortgage. i am no longer going to pay for now until. i have that confidence. month to money every pay. absolutely. sure.
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once everybody comes back from recess, a resolution that is going to be retroactive? it seems like splitting hairs right now, and it seems like everyone is kind of on the same page but that they ran out of time before the recess. >> i think you are right. i think it will be retroactive. i do not think we would take something that is not retroactive. august 2 or three? i think it is august 3. whatever that friday is, the first friday in august. it will be retroactive. this will go up. this is true. i think we will roll it back.
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a and we will not address this as of july 1. i cannot imagine we would not make it retroactive. yes, sir. >> i am a criminal justice and attorney. you asked for a more personal opinion. you want to know how it affects us directly. you can pretty much sum up how it affects it. i am originally from new orleans, a louisiana. and financial aid, the loans, that is pretty much what put us through. i am the youngest of 12. kids throughix college, and now, i have to
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pretty much find a way to make .t for myself this is out of high school come into college, to transition. my grades are much better. i think i do pretty well. my the loans themselves, parents are back in new orleans, so once i graduate college haven the year, but i will to make do. so trying to find an apartment or a car to be able to have a job, or to have just enough money to have an apartment and metro access would be difficult, having to pay back the loan. so i wanted to just give you that a little tidbit of my life. >> let me ask you, do you have a
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student loan now? >> yes. >> have you had a student loan every semester? >> yes. >> if you do not mind saying, you are a rising junior? >> yes. >> so you have another two years to go, another four semesters, what do you estimate your debt to be? $3,000 -- about >> person nester? >> yes, just to cover. >> so $6,000 per year. by my graduation. you all can pretty much see how this is affecting me once i graduate. we'restudents like me, trying to either stay in school, i am going to graduate. students try to
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take an extra year, so they will have enough time to be able to produce enough revenue to even at sea level versus below it. >> what are you studying? >> criminal. >> you said that. >> yes. >> this is one of my it -- one of our more affordable colleges, bill -- at education good education at bowie. you know, $86, i think my first whenmaybe $60 per week, you put it in context.
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yes? >> good afternoon, everyone. and also ay major rising junior. d.c., so, for me, it would have been different. i am also an on campus residence. $13,000 per semester to attend. like you said, this is affordable. and it is a bit scary. and we feel a commute would be
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much harder. it feels like it will be a constant struggle for both my so it is a bit scary, so i support the idea of a fixed rate. >> this is a family decision. i have been in financial aid for 22 years, and you can see our culture has changed over time. you are basically basing this on your family circumstance, and it is a very interesting concept. >> i do not think people recognize that it is a family issue. youget something that is -- are expected for a contribution. now, that does not take into account expenditures your family
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may have after that. >> yes. >> college. that has definitely started to help me. i have learned a lot. .e made it a lot harder it also changes what i want in my future. going to law school, graduates school, and all of that depends on the interest rate and the loans. i also work a lot with high schoolers. i am teaching a class. not a lot of them graduate and go to college. we are also talking about financial aid. there are seniors and juniors. these are the loans.
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they do not think they will be able to get the age. the defense.of we are basically discouraging future generations. >> which is bad for the country. that was my point. >> i think it is important to look at this in terms of education. ,aryland has done a great job but we are having a fight over interest rates. m.o. we are really looking for is a permanent deal.
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and people in congress want to move on. and this is the one we are looking for. i do not think anybody wants to do that next year. >> i think you're absolutely correct. unfortunately, we have been doing too many things on a temporary, short-term basis. .e compensate doctors we do it on an annual basis, called sustainable growth. and we give a research and development tax credit. this is to encourage them to new waysew products,
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of creating jobs and making money. that is re-upped every year. you can be confident. i know what my payment is going to be, so i can plan around that. sam, you're absolutely right. we need to do this on a permanent basis. that want toople do it on a permanent basis. solution to dod it. interest rate is going to be 3.4%. this is what the deal is. guess what? 6.8% or upped it to something. we do not know what it is. so you're absolutely right.
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of three.e oldest i have two degrees. had a full athletic scholarship. my brother, interested in engineering, and he does not know. whether he is going to be able to afford to go to school. not that motivation you anxiety, a company's high school? how hard am i going to have to work? a and paying off the loans, too much for young people.
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they should be worried about what major in school. >> let me just say from my experience that this is not a new problem. it is not a new problem. a $1,400 scholarship popeyes school. i went to suitland college. a $1,400 scholarship out of high school. i went to submit college. do you know where that is? and it required me to get another $1,800. was goingdea where i to get a $200, so i went to work. and i went to work starting the first of the year. because i hadm.,
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zero money. ney amily gave me zero mo for college. not because they wanted to, because they did not have any money. i could afford a semester of working. but this is not a new problem. it is just the magnitude that has gone up so much. relativelywas solvable. and now, that is not necessarily the case. >> because of its affordability now. get in, as fight to well. i could not have gotten into
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maryland. gotten could not have into maryland. i could not have gotten into here. very empathetic to kids. it was not predictable what i was going to do. but i could not have done it. i would have maybe gone to another school. there is no way i could've gotten into maryland the first year. not with the standards that exist when you now have to have s.a.t.'s offour the charts. i did well with the s.a.t.'s, but my grades were not. who wants to tell me what their thoughts are? i have grandchildren. where they aret going to college.
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daughter went to the university of richmond. that wear enough away would not visit on a regular basis but close enough so if she got homesick, she could come home. that was thousands of dollars per year, and that was in a late-1980s's. now, i am sure it is in the $40,000's now. >> like you said, you could have gone to a private university for more money, but you chose to go to the university of maryland because it was more affordable. >> i did not say that. what i said is because i could not afford the others. it turned out to be one of the best decisions that was made for me. >> my mom is a single mom. she put all of us through college, actually. it was pretty apparent, because
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i will have loans were ago, but she kind of laid it out for me an xcel spread sheet, of how much it would be if i went to various schools, and i ended up going to the university of maryland, partially because of the tuition, partly because i fell in love with it and loved the decision, but i was dedicated right off the bat -- that of how much i would have to pay. it was clear with the people i talked to, they did not realize the decision they were making, and they got into their dream school, which was fantastic, but when they got out, they graduate with six digits loans, some of them unemployed, and they did not necessarily know about the affordable alternatives, such as going to a community college for two years. i feel that we are not educating
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them as much fruit it sounds terrible to tell them they can go wherever they want and then be saddled with all of the debt because they did not know. even, like sam said, we are talking about interest rates, but i believe there is another problem, as well. >> you are absolutely right. we are talking about a bigger problem. i served on the board of trustees. i was on the board of regents until i became majority, and then i came off, but the college, we pride ourselves as being an affordable, quality institution. but we are having a struggle to keep an affordable, to keep prices down, to keep quality up and prices down. entire problem for the higher education system in america. and we're going to have to grapple with it, says sam is right. it is not just with the interest
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rates are going to be next year. it is about how to make sure all of you can afford to get in next year or the year after. and you are next. >> before coming to maryland, i was an academic adviser to the district of columbia, which is actually a very affordable institution, and we served a lot of nontraditional and other students, but even for those other students, when working with them and advising them, they were very avers to loans, and for many of them, -- now, is there anywhere with all in the house to increase those programs? even at an affordable institution, a very affordable institution, they still could not manage to pay those extras, like the books, like the metro transit. so i think these go hand in hand to a certain degree. it is not just reducing or
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keeping the rate fixed for financial aid. we also have to look at pell as well. >> you're absolutely right. the good news is we have pell butts, in they are grants, the bad news is it is about freezing the dollars at 2008 levels. i do not know how many of your families, if they were making $2,008, that they could afford to live in 2013, five years later. some of them are probably doing that, but they find it tougher and tougher every year. most people are not living on the same income in 2008, five years later in 2013, trying to keep up with inflation. the debate we are having in washington, however, it is not about increasing pell grants, it is about cutting pell grants.
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2009, 2010, we increased pell grants. when they were adopted, they said 30 years ago, that, theythan notaced it essentially, replaced but took care of, a certain percentage. i was on a subcommittee for 23 years. that period of time until it was less than 30%, in the neighborhood of 30%, so half of the value, the dollars. we increased it significantly in 2009 and 2010, but now, it is starting to wither away. why? decided money have we is available to spend, and invest in discretionary spending
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has been very substantially reduced. the labor and health education bill is projected to be the centers for disease control, pell grants, other matters dealing with education, is scheduled to be would it back at less than 2008 -- that would put it back at less than 2008. discretionary spending is not social security, not medicare. if you take from $1 trillion, if you take $54 billion, let's say defense is a little more, discretionary is a little less, nondefense -- let's say it is
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half. you take $54 billion from the , nondefense,edger and you put it on the defense side. that means you have $54 billion .ess, which is about a 10% cut impact on an adverse the ability to keep pell grants -- ifly from decreasing you don't raise them at least by inflation, you have increased the value of the pell grant. you're absolutely right, we need to increase the pell grants. not for you, for the country. if are going to compete in the global marketplace, which we want to do, it will be because toeducate our young people be the kind of growing economy that would need to be to create .he kind of jobs we need
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for the people who have the skills and wherewithal to work hard and be a welder. do not how much welders can make in america? to $90 anrs -- $80 hour. if you're going to put things together in america, you need to welcome -- weld them. you get my point. pell grants are something we ought to be increasing, not decreasing. a way to give students who have got a lot of ability but not much means into college so we can use their talent. sheryl sandberg says, lean forward. [laughter]
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is?ou know sheryl sandberg the ceo of facebook. she wrote a book about leaning in. >> wow. my name is amy. i'm an out-of-state student here at maryland and new jersey. >> why? is a magnet for new jersey. when i was here there were a lot of new jersey students here. there are new jersey students everywhere all across the east coast. what is interesting about affordability -- you were talking about how you were able $86, and especially because washington, d.c. is such a hub for unpaid internships -- >> that was when i was working full-time. half of that was probably $45 a week, then you take taxes.
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making net $28 a week. the idea that washington run so much on unpaid internships and students, it is creating this gap between socioeconomic classes. those who can afford to take -- i work anships job during the school year, usually to jobs and then i'm taking credits and doing internships. between my internship and paid job, i'm about 65 hours a week but only getting paid for half of that. i making a little bit less than minimum wage per hour that i'm working. no way with the semi covering what i pay for tuition every year.
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what i pay forg tuition every year. i have two younger sisters. graduated high school with her associates degree. because of that, she's able to steps becauseless she can only do two years of regular college. my parents have been trying to encourage her to do all four years. but she literally can't afford it because of the loans she would have to take out for college. >> which leads to the broader discussion. why them years -- why four years? is it the magic number? is three years the magic number? that is part of the larger discussion of what we're talking about in terms of higher education. i went nine years because i did part-time, and i did terribly my
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first year. that's a lot of schooling. . was 26 by the time i got out turned 27 shortly after i graduated. a lot of countries have three years of higher education, and in a transition -- then a transition of being partially law school or medical school. what we need is a larger discussion of how long is enough , what do you need, how much does it cost. a lot of big issues we need to discuss. and you put your finger on it. i didn't know of the delaware program, but that's a fantastic program. i don't think we have such a program in maryland.
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i said delaware. i knew you came for new jersey -- from new jersey. reverend have to be thinking along those lines -- we're going to have to be thinking along those lines. some people can take their first year of college in their junior and/or senior year. they are gifted. they ought to take advantage of that to save them money, and to save us money and have them in the stream sooner. he graduated college at 19. he is particularly gifted. he is the president of the u.n. bc. he is a math genius -- umbc. is a math genius. another governor o'malley is looking at programs such as what amy's sister did, figuring out ways we can cut costs here on
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the university level and get kids out quicker. where not only saving ourselves money, but but also the taxpayers, especially with in- state tuition. i think we are looking at that here, but making sure we are being supported on the national level. this gets away from the accelerate people out of school, get a job. principal objectives in america is to create jobs, grow the economy faster, have a make it in america agenda. jobs, grow manufacturing you grow jobs in every sector of our economy. focusesult, we do need to on that. we're not focusing on it is much as we ought to be.
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we ought to be doing that so that when you get an accelerated education, there's a place to use her your talents. your sister you say is brilliant. i'm sure you're brilliant as .ell, amy you should have some place to use it and make things happen. timeframe, -- what is our timeframe? we have got to wrap up. usdas the president of the here, someone who had an unpaid internship in my office. that's a really good point about .hese unpaid internships it's a little bit like the volunteer army. get the connection there, you know. from an economic standpoint, we
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have an army that is not as diverse as it used to be. when i taken -- when i came here, rotc was mandatory. 4000 male students in rotc of maryland. it was mandatory. reason thatt of the costs were deferred and that kept costs down because the federal government participated because it was useful for the country. you make a very good point on that, tom. on the ability to take an internship that is a very good credential, and experience. i think sam would tell you that although interns do critically -- i was work essentially an intern when i started working on capitol hill when i was a student here. i didn't do fancy work. i was not writing great
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speeches. exposed toeing something that was very helpful to me through the years. if you can't afford to take a nonpaying internship and devoted week?, how many hours a >> four days a week. >> some people can't afford to do that. you're right. we need to think about that. what is the option? paying interns. what is the problem there? cost. all the discussion in washington is not about increasing but decreasing cost. we need a big, balanced deal. simpson-bowles, gang of six, you name it. we need a big eel. -- deal. it doesn't mean you have to agree with every point in one of those recommendations, but we need to get our country on a fiscally sustainable path with
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certainty so that you know from year to year what the rate is going to be, what our budget is going to be, etc. uncertainty is hurting the country. that,s just one facet of and not the big picture, as sam said. i want to thank all of you for with youro everyday peers, and maryland --at maryland, and for what you are doing for your country in terms of making yourself more able to contribute and participate in a productive way in the life of our country. i really mean that very sincerely. maryland.alked out of i found out if you open a book, it makes a difference. it really did. you have to work at it. i did not work very hard in high school. i was ok.
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less. here and i worked in my secondme semester of what would've been my sophomore year, if you don't get your act together, you're going to be digging ditches. now, we need ditches dug. i don't criticize people digging ditches. i just did not want to be a ditch digger. so i got my act in gear. you have your act in gear. obviously outstanding students. thank you very much for doing that. i want to thank you. she and i have done a lot of work together. she has been very helpful to a lot of our students. she is extraordinarily conscientious and focus on helping young people get a good education. sarah, thank you very much for all you do. i appreciate it.
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i appreciate sam, your efforts to get this group of extraordinary people together. we will take your comments. we will enter those into the debate. i'm hopeful that we will resolve this particularly. i think sam is so insightful in saying, this is just a facet of a problem of higher education costs. it is like healthcare. , have toand medicaid deal with them. if health costs were contained, we would be fine. but they are not contained. we need to deal with that. thank you all. best of luck to you. if you can -- if we can help in any way, give us a holler. >> thank you.
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[captioning performed by the national captioning institute] [captions copyright national cable satellite corp. 2013] andhat was steny hoyer, local college students discussing college affordability. doubling of student loan rates went into effect at the beginning of the month. that issue is one of the items pending in the u.s. senate, when returns returns from its july 4 recess. a series of spending bills are also expected to be on the agenda. as for the house, they will consider spending bills beginning with one that focuses on energy and water programs. both chambers return monday at 2:00 p.m. eastern or you watch the house live on c-span, the c-nate live on c-span two --
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span2. >> coming up next, a conversation between former president bill clinton and new jersey governor chris christie about natural disaster preparation. makers" with dr. ardis hoven. five years from now, we will still be looking at a world that is dominated by the traditional tv packages. people have waited for years to see the package will part. it is starting to happen. you're starting to see erosion around the edges not through some seismic change in the business model or technology, but through the leakage of people out of the system at a very slow but accumulating
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right. over 10 years tom a that will be a very -- years, they'll be a very large audience. the entertainment industry will have to address that and serve them. >> were tried to up an opportunity for broadcasters to turn in some of their respective rights if they choose to. get a part of the option proceeds. >> more of what is happening in today's cable industry from this yours annual cable show. "the communicators." >> bill clinton and chris christie discussed the resources necessary in preparing and responding to natural disasters. governor crist are talking about recovery efforts in his state, following the aftermath of hurricane sandy.
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this is 40 minutes. >> now we are going to have a little fun. i want to invite to the stage a man whose reputation i have virtually ruined more than once. [laughter] we are both basketball fans, and governor christie used to have seats right behind mine at the big east tournament. i remember the first time i sat down and talk to him, i thought, this is going to wreck this guy's career. they will show pictures of him talking to me. maybe he can get elected in new jersey, but everybody else would say, oh my god, he is consorting with a liberal. [laughter] he never blinked. as far as he was concerned, as
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long as i could talk about basketball, it was ok with him. i am honored that he has joined us today. i do want to say in the interest of my commitment to keep cgi completely nonpartisan we did invite my governor governor cuomo to join him, but he could not be here today. we are going to talk about something that is really important, that is, what happens when the cameras go home after a disaster? this is so important. so to set this up, when i was president, i went to california 29 times in four years, and part of it was just one natural disaster after another. they had everything but a plague of locusts. then we had a 500 year flood in the mississippi river, and to rebuild it, we had to rebuild all of the communities -- it was impractical for some, because they were in a floodplain, and then all of these other things happened. then we come to hurricane sandy.
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the horrible tornadoes that leveled joplin, that have now --ricken oklahoma, we had for had tornadoes as far north as massachusetts and new york city last year. we need to give more thought on the responsibilities of leadership and how to plan for what happens after the disaster. mayor bloomberg, as i mentioned earlier, just last week revealed that $20 billion plan to try to make new york city resilient in the face of what is almost certainly going to be rising water levels in the years ahead. it is a big challenge. governor christie received an
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enormous amount of publicity, entirely well deserved, for his passionate advocacy for the people of new jersey and the work he did in the immediate aftermath of sandy. now there are no cameras there, but there are a lot of people still in trouble, and he is still doing that work. that is what i want all of you to think about. many of you live in communities that are vulnerable to one or another kind of natural disaster. we need to think about what happens when the worst is over and you have to plan for tomorrow. please join me in welcoming governor of new jersey, governor chris christie. [applause] so, even as effective as you
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are, and as i once was, we could not stop the big east from dissolving. >> no. >> after we get rid of this resilience thing, i want to do figure out how television revenues from football games can stop short of dissolving the greatest basketball conference in american history. it was really sad. >> what will we do next spring? >> watch a lot of television. [laughter] thank you for coming. thank you for bringing your family. your wife and son are here. where are they? stand up. [applause] christie's son is a student at
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princeton where he plays baseball. he is ok with the big east dissolving. [laughter] so once you got through that terrible emergency period, and all of the gripping pictures of people showing up, what did you do next? what have you done to this day from the time the emergency ended about the places that were devastated and the places that remain vulnerable? >> it is hard for me not to look back on it to pinpoint when the emergency ended. it is when you get into the aftermath of the situation. our view was, the first thing you have to do is return people to normalcy, and we define normalcy in five ways -- get their power back on, get the wastewater treatment plants or-- working again so they have clean water,
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get the gas stations reopened, get the state highways reopened, and get their kids back in school. we knew that when we got those five things done, than probably 90% of the state would be back to a sense of normalcy. i would gauge it from there. three weeks out, we had most of that under control. as you move forward, what you realize is this is going to be a years' long enterprise. sandy in new jersey alone, 355,000 homes were severely damaged or destroyed. 355,000. what you are looking at is, how do you give people a sense of hope and also do it in a smart way? the first thing we did was sit down with the mayors in the most effected -- the most affected towns. in new jersey, it is a very much home rule state.
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they control their local zoning and ordinances. they had to be full partners. we bring the mayors in. i met with a lot of them one-on- one to say, i want you have an an honest conversation with your residence. we are willing to ask the federal government to partner with us on a buyout program to buyout homes and properties that really should no longer be standing because they have been so perpetually flooded over time. but i'm not going to force people out. i want you to start having that conversation. in the places that do not want to sell out, how are we going to protect it? we came up with three ways to go about protecting them -- first, in the jersey shore communities, not all of our shore communities had army corps of engineers designed dune systems. there is lots of debate about this -- are they worth it or aren't they?
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sandy settled the score. in the towns that had army corps of engineers designed systems, the damage was minimal. and the ones that did not, the damage was complete. now there is no longer a debate in new jersey about whether we should have them as a safety precaution. that is number one. i pitched to president obama that that is one of the things that had to be included in the aid package, the ability to complete the dune system along the entire 130 mile long atlantic coast of new jersey. congress agreed. we have the money to do that. that is what we are working on now to do that. [applause] second, you had to deal with the ordinances and towns regarding the building code and work with the state to now deal with using better materials and more resilient types of standards. what we saw in new jersey was in
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an older town, a lot of big, beautiful homes on the ocean that were built in the 1950s or 1960s -- they look beautiful -- but they could not stand up to the storm. they had no dunes and very old homes under old codes. we have to bring those codes up in every town to deal with the new realities. our homes have to be much more hardened if they are going to be in these areas. you need to do that third. you have to work with fema on the flood maps and see how much you have to raise existing houses. i think what you're going to see in the jersey shore, when you come back in another couple of years, most homes within a four or five block area of the ocean will be now on stilts, pillars to permit the water that comes
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underneath to not create structural damage. all of those conversations had to be had at the local level in our state because new jerseyans have a tradition of being fiercely home rule, do not like being imposed state downward, and will fight brutally to prevent it. my job was to go to these towns and convince them that this is something that needed to do. so far, with some exceptions, i have been successful. that is part of what we had to do to deal with the homeowner side of things, let people know that this is a new world in a-- and a different world, and if you want to live here, and if you do not want to sell out, this is what you've got to do the next time a storm comes, avoid the risk to human
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life and damage to property. >> how many people took the option to take the buyout? >> very few comparatively speaking. although in certain towns -- i'm finding that in some of our more middle-class towns -- those folks have had it. jon bon jovi's birthplace, we are buying out probably 375 homes. those people are willingly doing it. we will probably get the first half of those bought out by the september. pretty quickly after the storm, within one year, those people will be out, and have the money in their hands to go to another community. my approach has been, i want to buy whole neighborhoods. buying houses piecemeal will not do anything. you will still have to deal with physical destruction in those neighborhoods in the aftermath of it. what we have been encouraging is for folks to get together as neighborhoods and to say, all of us need to go together.
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and in sayerville, and south river, we will buy about 500 homes. in phase two of the federal funding we are getting which will come in october, that will go down the coast and start offering the same kind of deals to others. >> once you buy the homes and you are in the position with the land and whatever remains, what are you going to do? what are you going to do with the land? >> passive use and try to set it up so we know it floods there, so let's use the lands and work the terrain to try to protect other parts of town. use natural approaches that will allow us to slow water down as it goes through. not walls, but natural types of structures, but nothing on the land for any human use. what we want to do is to use it as a buffer against neighborhoods that are closer.
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>> is there federal money to help to do that, to restore the land to its natural condition? >> yes. the hazard mitigation funds we are getting in the aid package, it helps us to mitigate against future hazards. >> if you do this and complete this project in a given community, will it have any effect on the availability and cost of flood insurance for the people that remain behind? >> no question. the fact is if we are able to do it effectively, for them, it will probably get them out of -- without getting too deep in the weeds -- out of the high velocity zones of water into either a regular flood zone or even out of a flood zone completely. the ripple effect for it will be significant. >> i do not want to get in the weeds, but i think this is important. the thing i love about the beachfront for new york and new jersey is it is one of the last
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remaining big stretches were middle-class people have real homes, real neighborhoods, real communities, real routes. -- roots. i'm shocked by the number of people who have come up to me personally -- chelsea organized a day where our foundation took 1000 people to the rockaways -- they had little publicity -- a lot of people here at cgi worked there, and i had so many people come up to me to say, i grew up here. all of their parents had standard middle-class jobs. i was afraid that when this property was vacated it would become the stuff of land speculation and all of these people would be thrown off the land. both you and our governor cuomo in new york have tried to keep the character of the place. in doing that, the insurers are really important.
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the availability of insurance and the affordability of insurance -- that is why i asked you about it. i think all of them should know that because there are similar decisions that have to be made in tornado alley. that is where i was governor. most of the years i was governor, we had the highest tornado destruction rate in the country. now it has moved little bit a tad north. you see southern oklahoma city and joplin. how much have you or your government had to work with the insurance industry since this happened? >> flood insurance now is being completely governmentally controlled. by fema. if you want to buy flood insurance, which you have to new jersey if you are in a flood area and you have a mortgage, the banks will require it. the only place you can buy is the national flood insurance plan.
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that is now completely controlled by the government. they will have private brokers who will help them to sell it, but the insurer is the national flood insurance plan within fema. the way we've got to work with insurance companies, it has been the business insurances and homeowners, and homeowners pay very little on this because every homeowners plan that i know, there is a flood exclusion. it predominately fell on the national flood insurance plan. that is why the real sandy relief package is about $50 billion, because $10 billion of the $60 billion went to the national flood insurance land,-- plan, which had been underfunded by congress and the administration. we have worked with nfip. it is challenging. sometimes it seems they are more concerned about an oig audit than the people that are buying insurance from them. we have worked with the administration to help keep
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pressure on them. they are the only game in town. >> i think it is really interesting -- the coastal land presented different rating challenges to them because most of these people were set up to deal with rivers overflowing their banks, so we had a 500 year flood in the lower mississippi. i think it was 1993 or 1994. we relocated entire towns that were built on the 100-year floodplain because we did not have enough information to know that those areas were going to flood more often than every 100 years. we know something generally like that about the oceans, but i think a lot of these guys are shellshocked because they are not sure that all of the prediction models are out of the window. >> it's true.
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for a place like new jersey, there is a real romantic attraction to the jersey shore. for folks who live there, whether it is their primary residence or they go to vacation there and they rent those homes, they are close or on the ocean, new jerseyans do not want to give that away, even in the face of these obvious challenges that these storms have brought. there is an emotional connection by the people. we just reopened 22 of the 23 boardwalks on the jersey shore by memorial day. i was going to a number of boardwalks, and i cannot tell you how many people came up to me, grabbing at me and saying, thank you for giving us the shore back. there is an emotional connection.
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as a leader, you have to recognize that part of it, it is not not just going to be a calculation -- it is an emotional connection, and you have to do things to try to give people the ability to still have that emotional connection to the place they grew up, where they took their children. not those children are taking their children there. that is part of the challenge from a leadership perspective. >> let's talk about what we should do next. what should we do, what advice would you give the governors and mayors of these coastal towns that have not been hit yet? what can they do to improve resilience, to improve resistance, to reduce damage from a storm as severe as sandy now? i got to thinking about this, because obviously, we could just watch what you guys have been through in new york and new jersey, to a lesser extent in connecticut, and say, well, we
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should do as much of this is possible, and we ought to be able to do it at lower cost if we start now all up and down the atlantic coast and into the gulf area, but it looks to me like the funds do not flow until something bad happens. if you were designing this, what would you recommend to the governors and the mayors of these communities, and what would you recommend to the national government in terms of redesigning our response? >> you are right that we had a number of these systems that have been authorized by congress, and some of them were authorized by congress for 20 years but never funded. you have to have a cost-benefit analysis of whether or not you need to do this upfront because what happens now is, as you
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said, the funds do not flow until there is a disaster. then you are dealing with it in a hyper elevated state in terms of cost and demand. we have companies coming from all over the country to help redo this rather than doing it in an orderly way because we are back in the middle of hurricane season again. what i would say to other governors is you need to look at your own funds that you use grid -- use, and every state along the coast has this. there is beach replenishment funds that they put to either a dedicated fee or tax from general funds monies, and start to look at, instead of doing these replenishments to make the beach broader and prettier, but to take some of that money and say, let's build dune systems. to me, the only way besides the ordinance exchanges in making the homes are resilient, the
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only way to do this on the coast, it is a type of natural system that will protect you against this type of storm surge. whether it is a wall or a dune system, either one, those are the things you will have to do. i think states have always looked at it along the coast and the monies for beach replenishment, it is a tourism investment -- i want to make the beach broader, ready or, more-- more chairs, more blankets. now you have to start thinking, i've got to protect the property inland, and the only way to do that is through dunes. they can push congress, although in the current climate, whether or not congress will appropriate that money is questionable. states have already spent along the coast significant amounts of this money in other ways. maybe they need to redirect it. that is what we are doing now not only with the federal money but with the state money, i am now redirecting it towards paying for our share of the dune building because there is a cost share with the federal government.
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>> what about -- is there some way to use the insurance system to require that any new housing built conform to new standards? >> absolutely. we are doing it. we are giving people a choice essentially. if your house is 50% destroyed or greater, you have no choice. you must build to the new fema standards. if you are at 51% destruction of your home or greater, it is required that you rebuild to new federal standards, but what we are saying to folks who are not damaged at all or less than that, we are offering to them the opportunity to raise their houses now. the benefit is going to be, they are going to cut their flood insurance costs by two thirds if they do it.
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the upfront investment of about the $2000, which is the average $50,000, which is about the average, you are going to save that amount of money within three years of the investment, maybe two years. we are trying to give people a mix of the regulatory requirement, and those who are less than the 51%, we try to give you a powerful economic incentive that if you elevate now, that that investment will pay for itself within two or three years. >> the reason i am talking to all of you about it -- you may live in nebraska and think this is crazy, but the truth is if you live in nebraska, you've got probably the same kind of considerations about either local river flooding or tornadoes -- we do not talk
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enough about this generally and publicly. the only country that has ever really done this right is the netherlands because it is so small, and they were totally flooded. at the beginning of this year, i took my first trip to africa to see some of the work we were doing in northwest africa. in nigeria, which we associate with oil systems that do not work, brownouts, religious and political conflicts, a developer is building a 9.5 kilometer wall with interlocking concrete parts to let water in, designed by a dutch firm, based on their
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experience, and they have already recovered 10 million square meters of land to protect the point of lagos, which is an island. it is a first time in a developing country i have seen the kind of preparation to avoid disaster that i think we should be doing all over the world. if you have a population map of america, and you look at the percentage of our people that live from maine all the way down to florida and around in the gulf coast and at the pacific coast, as is something we need to think about. we need to redefine leadership beyond just how you respond in an emergency to how you keep the emergencies from happening. >> no question. [applause] >> he's done a good job. i wanted you to hear this. the enduring image most americans have of you is standing there in your jacket,
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grieving with their people,-- your people, working with them, and working with the president, and you got both praise and damnation for ignoring the political differences that you had then and still have with the president and all of us in the other party, to do something that was really important. i wanted them to hear what you are doing now because i think this should be as unifying as that. we've got to stop waiting for something horrible to happen and then spend 10 times as much as we would have to spend to keep it from happening. >> the people in nebraska should care about it because they are paying for it. right? [applause] even if you have no interest in this subject, you are paying to rebuild the jersey shore right now. nebraska, iowa, kansas, south dakota, north dakota, you are paying it. arkansas, of course, mr. president. [laughter]
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it is an issue because of the number of people who live there and the expense associated with rebuilding in that area. one of the things i was trying to explain to president obama was, when he took the first tour there two days after the storm, i said, mr. president, in a state like new jersey, to rebuild 365,000 homes in some of the most, if not the most, expensive real estate in america in new jersey and new york, this is incredibly costly and one we have to try to avoid doing another time after this. that is part of the argument i made to him about the investment of billions of dollars that is going to cost the federal government and state government to build that dune system, but to do it is going to avoid -- the loss to new jersey in the storm of property was $39 billion -- so to invest $3 billion or $4 billion to try to prevent another $39 billion and
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losses seems to be whether you are republican or democrat a pretty smart investment to make for the country. [applause] >> just to close the circle on this, if you were, if you could make federal policy by fiat -- >> how great would that be? >> looks better to me all the time. [laughter] how would you redesign this? would you put this prevention and resilience function, would you put it in fema or lodge it somewhere else, or would you set up the funds for which states could apply if they had a preapproved plan -- how would
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you structure this so that we americans could minimize future losses and maximize future security? >> i would tell you that i would take it out of fema. i think fema's mission is getting too broad for it to be good at all of it. i think fema should be what it says, which is when you need to manage an emergency and natural disaster, they come in and help you manage through the emergency. the immediate crisis. i think within the homeland security department, taking this out of fema, and whether or not you put it in noaa, or you put it in a function like that and say, these are people who will have long-term planning responsibilities for dealing with resilience -- i think matching funds or the state has to pony up as well for long-term planning makes sense, that the federal government should not
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have to absorb all of these costs themselves. you work on what the cost share would be. everybody would have skin in the game. if the feds are paying for everything, you might want to do things in one way, but if you have to justify to your home taxpayer the investment, you might do it another. i think it is hard to get the national flood insurance plan out as a sole source of flood insurance. i think it was a bad idea. i think you need to get the private sector involved in this as well. that kind of responsibility inside the government exclusively, any type of monopoly is not good. i think the government had a monopoly on providing a particular type of insurance, and it creates a bureaucracy that is self-defeating because now they are more worried about oig investigations and audits than they are about paying claims. oig gives them more of a headache than any common citizen could.
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they react as bureaucracies due to that. -- do to that. to do with this over the long term, to make the flood insurance both affordable and responsive to the customer, they should take it out of the federal government and allow that to be handled by the private insurers and homeowners. >> for all of you listening, maybe most of you know what noaa is, but it is the national oceanic survey, and it is a great agency because they monitor the movement of the oceans. their ability to predict the likelihood of things like this happening is extraordinary. to imagine the effects of greater ice melts up north and other kinds of external factors in the ocean and the likelihood of more storms and where up-and- down the continental united
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states they would happen, that is quite high. i never thought about using them before, but at least they could be a resource in trying to make good judgments about what the insurance rates could be. >> i think they could help prioritize the resiliency money. where do we have the greatest risks for this to happen again? focus federal resources on the place where there is the greatest risk the most quickly. it is going to be a long-term project for our country to deal with the coastline of the continental country and to deal with these types of problems. it seems to me that if they are in the business of predicting where we are at the greatest risks, they could be the agency better than fema who could be making the decisions on how to prioritize funds in a time when we have limited resources in the country on all types of infrastructure demand that we have. this is another infrastructure demand, this protection of our coastline, and i think that is one idea -- none of them are perfect -- it is one idea that could work. >> do you think there is enough
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awareness between what you have been through in joplin and oklahoma and all of these things we have been through in the country -- now we are dealing with these unusually severe wildfires out west -- that we might be able to get a huge bipartisan majority of governors to ask for this kind of reform? >> i think so. so many more of us are now getting affected directly by it. i think it is very difficult to understand this until you have been through it. i think the overwhelming nature of a significant natural disaster -- to give you some perspective, there are 8.8 million people in new jersey -- when i woke up morning of tuesday, october 30, 7 million people in new jersey were without power. the state was closed. i went on google earth that night and looked.
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as you went up the east coast, you saw the lights in the evening. if you get to new jersey, it was dark. until you go through something like that, all of this is conceptualizing. i think governors are practical folks most of the time. they are trained to deal with the problem in front of them. i think you're getting -- i have spoken with governor fallon in oklahoma who now has an even greater understanding of what it is like to see this kind of destruction and how to deal with the human cost and economic cost i think we are building towards that. the one thing i will tell you, there are no partisan lines on this one when it happens. you're reaching out to everybody you can. i was reaching out to every governor i could to say, can you urge your utility companies to send us crews? can you send some national guard troops up? i think this type of crisis breaks down a lot of the barriers between us.
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[applause] >> one reason i ask is, i ran five times the governor, and not one time did anybody ask me on the street, in a press interview, or during a debate what i would do about any of this. i lived in a state that then had the highest incidence of tornado damage rates in the country repeatedly. i followed your governors race closely. nobody ever asked you about it. we were all arguing about the education policy, and to this one or that one get hired or not. you remember the whole thing. >> yes, i do. [laughter] >> this is really important. we've got to start to become a resilient society. we know we are resilient
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internally, but if you plan to resist the worst destruction, if you plan for a quick spring back, you can do this and minimize these damages. i wanted all of you to know how much work he has done on this. i think it is really important. we see these disasters. they have these indelible impressions in our mind. we form conclusions about what people did or did not do. what matters equally as much is what happens the day after everybody else is gone, and you are left with trying to put people's lives back together. >> the other thing that contributes to this -- you are right, we never do get asked about it in the concept of campaigns unless you just got through something like this -- uniquely, when this kind of thing happens, republicans, independents, democrats, you turn to government.
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no one in my state was arguing to me that on tuesday, october 30, governor, you should privatize the response to this storm from here on out. [applause] this is one of those things that i think regardless of where you fall on the ideological spectrum, you would agree that this is government's responsibility. if it is, and demonstrably so, when you look at joplin, moore, sandy in new york and new jersey, then governors need to be thinking about these things much more than we do before. to be focusing on how we prevent this kind of severe damage in the future. one thing i can tell you for sure is you never want to go through it again. you do not. i can tell you that the other thing that contributes to this
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that makes people skeptical and not want to plan is the way the media covers this. any kind of storm, there is nothing that the networks love more than an oncoming storm. everybody is like ok, get in front of a television set, the storm is coming to me. they want to make it sound as bad as possible. if you make it sound really bad, people will stay in front of their tv and say, tell me more. when it is not bad, when it is just ok, people start to say, the hell with it. we had hurricane irene the year before. all the national weather service and other people are telling me, governor, this is going to be catastrophic. ok, so i will prepare for that. i evacuated the entire new jersey shore. i said, get the hell off the beach. mary pat said to me, did you really tell people to get the hell off the beach on television?
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i said, this is new jersey, i felt like this is the only thing they would understand. [laughter] it wasn't so bad on the shore. we had inland flooding. now when we had sandy and i told people, this is going to be bad, there were people on the shore. i went to the shore the days before and had to tell people personally -- they would say, you said that last year -- part of the problem for planning is that people become cynical about whether we can really predict these things. if we predict them wrong, then why should we invest the money to do it? that contributes to the thesis of your question -- there is a growing bipartisan consensus on this because so many of us have now gone through it. once you go through it in my state, people are going to get off the hell of the beach really quick because they saw what happened.
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>> i am looking at a sign that says, governor must depart for airport. [laughter] neither one of us control the chicago airport yet. let's give governor christie a big hand. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> here is some of our live programming tomorrow on the c- span networks. donna edwards has a conversation about the future of space exploration. live a 9:00 a.m. eastern.
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4:00on c-span 3 live at eastern, house energy and commerce subcommittee hearing examining the health care laws impact on the medicaid program. directorer, former cia discusses energy >> coming up next, newsmakers. biannual debate in toronto with the newt gingrich and former greek prime minister on the issue of taxing the rich. after that, q and a. >> joining us this week on "newsmakers" is dr. ardis hoven. here in the studios to ask